Asia’s ringback tone craze

by staff on 03 March 2005, 00:00

Categories: General news - Communications
Topics: Verizon , Piper Jaffray , KongZhong , sms , tom online , T-Mobile , sk telecom , mobile music , Benjamin Joffe , ringback , ring back tones , RBT , Linktone , IVR , KT Freetel , LG Telecom , Safa Rashtchy , Vectis International

 

BEIJING—When you call Kou Zhengyu of Beijing’s death metal band Suffocation, you’ll hear American guitarist Steve Vai playing while the phone rings.

It’s a reflection of the latest rage in phone service in Asia: ringback tones (RBT), which allow callers to hear a song while waiting for the other party to pick up or when waiting to check their own voice mail.

Asia

Subscribers to the service in China are expected to more than triple to 65 million customers this year from 20 million last year when the service was launched by China Mobile. In South Korea, where the service has been available since 2002, a whopping 40 percent of cellular subscribers use ringback tones offered by carriers SK Telecom, KT Freetel, and LG Telecom.

South Korea

Because RBT is voice-based, any phone subscriber can use it, whether they’re using GSM, CDMA, or GPRS handsets. And it works for hard-wired phones, too. Shanghai-based Linktone, a wireless value-added service provider, offers the service through fixed-line operators China Netcom and China Telecom in 15 provinces—a bid to tap into China’s 300 million-plus fixed-line subscribers.

China Telecom

“Ringback is hot. It has real appeal, and is simple to use and set up,” said Linktone CFO Mark Begert. “It’s an innovative media using traditional network technology.” Users sign up simply by visiting the Web site of a wireless value-added service provider: Chinese Internet portals including Sina, Sohu, and RBT market leader Tom Online, and several leading pure-play wireless companies like Linktone and KongZhong all offer ringback tones.

RBT has helped to take up the slack left by a softening Chinese market in SMS value-added services, which has been hurt by stricter billing practices and government regulations. Other popular music services in China include song dedications made by IVR—interactive voice response, a voice service driven by touch tone menu selection. Linktone, for example, derived 12 percent of its $15.5 million fourth quarter gross revenue from RBT and IVR services.

China

Some companies are now acquiring rights for particular artists. Tom Online, for instance, signed an exclusive deal for ringback tones with Taiwan hip-hop sensation Jay Chou in mid-2004, and Linktone has signed deals for RBTs from top artists in the Sony and EMI stables. “Our music partners have had enough foresight to see this as a wireless, and even fixed-line, digital music opportunity,” said Mr. Begert.

Sony

In Korea, users are able to order RBTs by IVR, directly via their mobile phones, and on the Internet—still the biggest driver of RBT subscription. Korean mobile users can also replicate someone else’s RBT: “If you call someone, get a song you like and decide you want it, you can order their same ring back tone at the touch of a button,” said Benjamin Joffe, co-author of a new Vectis International study called Mobile Music Best Practices from Japan & Korea.

Mobile Music Best Practices from Japan & Korea

RBT has, in the last six months, begun to gain significant traction in the U.K. But why has this low-tech service failed to catch fire in America? “For young people in Asia, the phone is a fashion accessory, and having a personalized ring back tone is just further accessorization,” said Safa Rashtchy, managing director of Piper Jaffray, at the Piper Jafray China Internet & Technology Conference which concluded Thursday in Beijing. But with T-Mobile and Verizon having recently begun offering the service, Mr. Rashtchy is bullish: “I believe it will take off soon with young people in America as well.”

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